ABB Annual Report 2012 PDF - ABB Group Annual Report 2012

3.2 Changes to the share capitalIn 2011, ABB issued shares out of its contingent capitalin connection with ABB’s Management Incentive Plan (MIP).For further details about the MIP see note 18 to ABB’sconsolidated financial statements contained in the Financialreview section of this Annual Report. The resulting sharecapital of CHF 2,384,185,561.92, divided into 2,314,743,264fully paid registered shares, was reflected in ABB’s Articlesof Incor poration dated December 5, 2011.In 2010, ABB issued shares out of its contingent capitalin connection with the MIP. The resulting share capital ofCHF 2,378,045,525.92, divided into 2,308,782,064 fully paidregistered shares, was reflected in ABB’s Articles of Incorporationdated December 20, 2010.In 2010, ABB paid its dividend relating to the year 2009by way of nominal value reduction in the par value of itsshares from CHF 1.54 to CHF 1.03. Corresponding adjustmentswere made to the par value of ABB’s contingent andauthorized shares. Furthermore ABB cancelled 22,675,000shares that had been repurchased under its share buybackprogram. The resulting share capital of CHF 2,375,849,290.91,divided into 2,306,649,797 fully paid registered shares,was reflected in ABB’s Articles of Incorporation dated as ofApril 26, 2010.Except as described in this section, there were nochanges to ABB’s share capital during 2012, 2011 and 2010.3.3 Contingent share capitalAs at December 31, 2012, ABB’s share capital may be increasedby an amount not to exceed CHF 206,000,000through the issuance of up to 200,000,000 fully paid registeredshares with a par value of CHF 1.03 per share throughthe exercise of conversion rights and/or warrants grantedin connection with the issuance on national or internationalcapital markets of newly or already issued bonds or otherfinancial market instruments.As at December 31, 2012, ABB’s share capital may beincreased by an amount not to exceed CHF 10,300,000through the issuance of up to 10,000,000 fully paid registeredshares with a par value of CHF 1.03 per share through theexercise of warrant rights granted to its shareholders. TheBoard may grant warrant rights not taken up by shareholdersfor other purposes in the interest of ABB.The pre-emptive rights of the shareholders are excludedin connection with the issuance of convertible or warrantbearingbonds or other financial market instruments or thegrant of warrant rights. The then current owners of warrantswill be entitled to subscribe for new shares. The conditionsof the conversion rights and/or warrants will be determinedby the Board.The acquisition of shares through the exercise ofwarrants and each subsequent transfer of the shares will besubject to the restrictions of ABB’s Articles of Incorporation(see section 4.2 in this Corporate Governance Report).In connection with the issuance of convertible or warrantbearingbonds or other financial market instruments, theBoard is authorized to restrict or deny the advance subscriptionrights of shareholders if such bonds or other financialmarket instruments are for the purpose of financing or refinancingthe acquisition of an enterprise, parts of an enterprise,participations or new investments or an issuance on nationalor international capital markets. If the Board denies advancesubscription rights, the convertible or warrant- bearing bondsor other financial market instruments will be issued at therelevant market conditions and the new shares will be issuedpursuant to the relevant market conditions taking intoaccount the share price and/or other comparable instrumentshaving a market price. Conversion rights may be exercisedduring a maximum ten year period, and warrants may beexercised during a maximum seven year period, in each casefrom the date of the respective issuance. The advancesubscription rights of the shareholders may be granted indirectly.In addition as at December 31, 2012, ABB’s sharecapital may be increased by an amount not to exceedCHF 96,859,964 through the issuance of up to 94,038,800fully paid shares with a par value of CHF 1.03 per share toemployees. The pre-emptive and advance subscription rightsof ABB’s shareholders are excluded. The shares or rightsto subscribe for shares will be issued to employees pursuantto one or more regulations to be issued by the Board, takinginto account performance, functions, level of responsibilityand profitability criteria. ABB may issue shares or subscriptionrights to employees at a price lower than that quoted ona stock exchange. The acquisition of shares within the contextof employee share ownership and each subsequent transferof the shares will be subject to the restrictions of ABB’s Articlesof Incorporation (see section 4.2 of this Corporate GovernanceReport).18 Corporate governance report | ABB Annual Report 2012